[rhiltd]

Why on Earth would ANY startup want to play "Treasury" like a large corporation? Using the KISS Principle an 'normal' bank account is much better. We all have better things to worry about than an extra 1% return on 'cash'.

As Warren Buffet says, if you don't understand it not invest in it.

[motoko]

Because "the experts" told them to.

One wouldn't want to be "miss out" on "greater returns for 'virtually' no risk" because they were "too stupid or cowardly to understand it..." according to your VC.

[ojbyrne]

These things were seen as no-risk, basically like money market funds. Some startups have raised 8 digit numbers of money, and they have a CFO, and that CFO would be neglecting his fiduciary duty if he left millions in an account that earned 0.25% interest.

[marvin]

Excuse me, but since when do money market funds earn 0.25% interest?

[ojbyrne]

I was saying that safer alternatives to money market funds (i.e. checking accounts) pay 0.25% interest. I guess it came out a little unclear. These were seem as just another kind of money market fund, 100% safe. To keep money in a checking account rather than putting it into a perceived safe investment that paid a higher rate without sacrificing liquidity, would be neglecting fiduciary responsibilty.